Myself and one equal partner entered into an LLC 3 years ago, We are
now ready to desolve the business, however we have approx. $50,000 in
business credit card debt. I recently checked my crdit report and non
of the business credit card accounts show up on my personnal credit
report. I'm I or my partner liable to pay back this business credit
card debt ?

Hello cedardog,
Thanks for your question!
You will not be liable for the debt. You will want to look into this
at the state level to make sure that there is not an exception in your
state, but the very nature of the LLC is that the owners have "limited
liability."
Nolo
LLC Basics
http://www.nolo.com/article.cfm/catId/1745D9A3-D50D-4AAD-BFB3ED609A4EE3F5/objectId/D7043E4E-91CB-4B29-B8DC0DDA10AD4B3B/111/ART/
'Like shareholders of a corporation, all LLC owners are protected from
personal liability for business debts and claims. This means that if
the business itself can't pay a creditor -- such as a supplier, a
lender, or a landlord -- the creditor cannot legally come after any
LLC member's house, car, or other personal possessions. Because only
LLC assets are used to pay off business debts, LLC owners stand to
lose only the money that they've invested in the LLC. This feature is
often called "limited liability."'
misc.taxes.moderated
"LLC Liquidation-negative capital account"
http://groups.google.com/group/misc.taxes.moderated/browse_frm/thread/2b8e8f3acf1b10be/23e42833254816f4?lnk=st&q=llc+debts+liability&rnum=5&hl=en#23e42833254816f4
"The first thing that
comes to mind is why are they assuming liability for the
debt. As an LLC they may not be obligated under state law
to make good on it (although I find it admirable for them to
be honoring the debt of their company). Anyway, assuming
that they either guaranteed the debt previously such that
they are obligated or are assuming the debt out of personal
ethical reasons, the answer should be the same. Prior to
the assumption, they were each allocable 50% of the debt
under 752."
"I assume the partners are already personally liable (e.g.
as guarantors) for the debt. Otherwise, it would not make
sense for them to assume the debt since they should be
protected by the limited liability of LLC members."
misc.taxes.moderated
http://groups.google.com/group/misc.taxes.moderated/browse_frm/thread/2368a7362384c72c/76d6ea6a21efdd32?lnk=st&q=llc+debts+liability&rnum=6&hl=en#76d6ea6a21efdd32
"Corporations were originally set up to limit the liability
of the owner of a business. With a corporation the owner is
only liable up to the amount of his investment in the
company, or for his own negligence. It also protects
against liability for the negligence of others (contrary to
the rule in partnerships). And it also protects against
personal liability for non-tort debts.
If the company just takes on too much debt and ends up going
bankrupt, the owners of the company don't have to come up
with their own money to pay off creditors of the company."
misc.legal.moderated
"Liability Protection of an LLC/S-Corp?"
http://groups.google.com/group/misc.legal.moderated/browse_frm/thread/b4b066d81b94c1ac/885a3800218cb1f9?lnk=st&q=llc+debts+dissolve&rnum=2&hl=en#885a3800218cb1f9
"An LLC protects you from _contract_ liability. If you get in over
your head, and your business expenses exceed your business sales over
a period of time, you can dissolve the LLC and walk away from those
debts."
"For example, if a single member
LLC operates a business and the business fails and there is no gross
negligence on the part of the part of the owner - the business simply
failed - the LLC should provide protection of personal liability from
business creditors."
"A corporation or LLC protects you from contract debts of
the business that you did not personally guarantee."
alt.lawyers
"Question about a Limited Liability Company"
http://groups.google.com/group/alt.lawyers/browse_frm/thread/360c382093ee48ae/af3949ad04a1686c?lnk=st&q=llc+debts+liability&rnum=1&hl=en#af3949ad04a1686c
"Ir's true that the key element
of the LLC is that the members have no personal liability for LLC
debts regardless of the lack of formalities in maintaining the
LLC. But I wouldn't trust that proposition totally. You still
have to prove that suppliers were relying on the LLC's credit and
not your personal credit..."
misc.taxes.moderated
"Death of the Partnership?"
http://groups.google.com/group/misc.taxes.moderated/browse_frm/thread/beedff77c680021a/2992ed1fb9cd2346?lnk=st&q=llc+debts+liability&rnum=2&hl=en#2992ed1fb9cd2346
"On the downside all members of an LLC are not assumed to be
personally liable for basis, at risk, etc purposes as are
general partners. Of course a general partner can be determined
to not be at risk, etc but that is the exception not the rule.
An LLC member on the other hand should be assumed to not be
liable on any LLC debt or liability unless he/she specifically
guarantees it."
Search terms:
(on Google Groups)
llc debts dissolve
llc debts liability
(Google)
llc debts liability
If you need any additional clarification, let me know and I'll be glad
to assist you. Happy Halloween!
--keystroke-ga

Remember also that any assets you've declared as belonging to (being
used by) the business may be taken by creditors.

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